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enter image description here What is the function of the capacitor C1 in this inverter circuit?

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That is a DC-Link capacitor. It's to reduce ripple and voltage spikes. Generally you'll have a DC-Link capacitor and smaller ceramic decoupling capacitors. The ceramic decoupling capacitors should be placed close to the devices and will preform better at reducing voltage spikes than the bulk electrolytic especially in high dv/dt switching transitions.

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